Private tutor not paying tax??

[Sudburyswan]

Hi,

we use a private tutor for our son -just an hour per week. A nice guy who works at a local secondary school. He also tutors some friends kids and I’d estimate he’s earning £100 during term time on top of his teaching salary.

When he was here last weekend I was working in my tax return and I was moaning!! He made the comment “ I’m glad I don’t have to do that”- well surely he should be?

I know he’ll get the £1000 trading allowance but I still reckon he’s got 3-4 k of potential undeclared income. We pay him by bank transfer too.

I’m in two minds whether to report this.

surely hmrc’s systems will pick up this money entering his account??

Do you really think HMRC can look in our accounts?!

No idea how it works in UK but in my country you get an end of year statement from your bank account that you have to include in your tax return, so yea, they know the income and outgoings over a year that you have to submit for your tax bill.

Do you mean I should have said tax evasion? If so please do say rather than asking PA questions…

Would your opinion be different if he was a millionaire? Maybe a lottery win or big inheritance but still works as a teacher and tutors on the side? What does his net wort have to hit before this isn’t ok anymore?

I don’t think the OP should report this but lots of commenters seem to think this is ok because of his assumed earnings.

You’re joking right?? Yes, yes it’s people doing a few extra hours a week that would make all the difference not the super wealthy or the big corporations that dodge tax. It’s us poor teachers earning a few extra quid on the side.

I think most of us are objecting because the OP is making a massive leap to the worst possible conclusion. There is no evidence he is doing his taxes incorrectly on purpose.

Which is entirely reasonable. Countries like the US also require overseas FIs to report assets of all US taxpayers to the IRS, the UK is relatively lenient in its reporting requirements

“Us poor teachers” 😂

You estimate that he earns £100 a week during term time. So a maximum of £3900 a year but probably less with missed sessions for sickness or holidays or events. Tutoring often tails off after exams or in the summer. Deduct his costs eg travel, materials, textbooks, insurance. Maybe he is under the £1000 threshold. Or maybe he is paying into a pension. Or someone else does his accounts. Or he submits figures for HMRC to calculate his tax in September. Or your estimate is completely wrong. Maybe he hasn’t had to do a tax return yet as he hasn’t been trading/earning enough so far as he is new to tutoring. Self assessment in January 2025 is for the 23/24 tax year.

Maybe he is earning more than the £1000 trading allowance but it sounds like he doesn’t think he needs to do self assessment, so it is a genuine mistake. I doubt he would have said that if he is actually intentionally evading tax 🙄 I would assume you have misunderstood but before I dobbed someone in for potential tax evasion for such a tiny amount when it seems like he doesn’t need to or he doesn’t know he needs to declare it, I would have made a comment like “oh don’t you have to declare your tutoring fees, I guess you don’t need to if your profits are less than £1k”.

I think the OBR said GDP was some £311bn lower by 2035.

I know GDP loss isn’t the same as tax revenues. From what I recall it was based on estimating if we’d stayed in the EU and trade had kept growing and job creation and investment had kept growing (on the trend line adjusted for factors like covid, war, etc), then we have lost alot more than the minus from where we were in 2015 as trade has massively declined, FT jobs have been lost, businesses have folded or shrunk….

If you’re seriously concerned about the ethics here (and I would not be), I would look elsewhere for the tutoring services. But there’s no way it’s even worth it for the government to investigate a case like this given the small sums involved.

Glad your critical thinking skills are working and you took what you needed from that

The £1k refers to turnover not profit.

Say he has a spouse who doesn’t earn much and hasn’t used all their tax free allowance - they’ve transferred a further £1.2k allowance across to him and shaved £252 off his tax bill.

He probably has expenses as well - past papers, printing, marketing, travel.

He probably owes a tenner in tax!

I doubt it. Starmer would probably give it to the train drivers.

They don’t look directly, the banks send them the info. And not just banks

The range of sources HMRC now regularly receives data from relating to taxpayers includes:

• Online retail platforms
• Property sales platforms
• Online payments providers
• Other government departments
• Social media
• Banks
• Insurers
• Pension providers
• Local authorities
• Airports and airlines
• Social media platforms

Beyond petty. You know nothing about his personal circumstances.

Of course it would be. You’ll know already that someone earning a huge salary and evading tax is naturally evading a higher sum in tax than someone earning a far lower sum. I think lower earners often evade paying taxes to make ends meet and to put food in their child’s stomach, whereas ultra rich people do it to become even more rich.

Since we‘re all forced to assume things because the OP actually has no clue about this guy’s situation, what if his wife is dying of cancer and is unable to work so his tutoring money goes to pay the mortgage? Or maybe he’s been conned out of thousands and is trying to work extra to pay it back. Nobody knows.

A nice guy who works at a local secondary school. Helps your kid.

And you want to report him? JFC.

1. the students have to pay for books and materials
2. many teachers dramatically INCREASE their tutoring hours in school holidays. School holidays aren’t just over summer….
3. £100 a week is the minimum they’d probably be earning. Ours gets £90ph as he has 3 students together, he does at least 10h per week… so easily earning £40k per year.
4. Asks for it all in cash up front because “easier to manage payments” (than ticking off a name from a bank statement).
5. if you want to pay by BACS you have to specifically request to do so and he writes an invoice (which he then runs through a Ltd company I guess?)

Not sure the “poor teachers” making a bit on the side argument stacks up really?

You pay him by bank transfer - it doesn’t make sense someone creating a papertrail is avoiding tax. It’s likeky he gets someone to do it

Definitely petty

Think about how many trades are now cash only. And they own massive houses and cars. And pubs who say cash only as their machines are broke (on big nights where they make a fortune). A teacher who is trying to make a few quid is not the problem

Tax inspector here 👋🏽 It would not be cost effective for the hours spent requesting bank statements, reconciliation and general email correspondence etc for the yield of tax based on the undeclared income. Leave the guy alone.
Maybe take a second look at who's doing your nails, or washing your car, or the takeaway that's changed hands three times last year, or the 6 people working in the empty barbershop. That's the real problem. In plain sight.

No you can should have just said what you really think - one rule for teachers and one for everyone else.

Yet that’s exactly what some tax inspectors do! Even for stupidly small amounts of tax.